More Than Just Deposit Insurance: The Many Ways the FDIC Helps Consumers

You know that the FDIC insures deposits if an insured bank fails. But there's a lot more to how the FDIC helps consumers. Here's a look at various ways the FDIC serves and protects individual households and local communities.

Supervising banks for sound operations and compliance with consumer laws: To promote safe banking practices, the FDIC and other federal and state bank regulatory agencies constantly review financial data from institutions. More detailed information is compiled and analyzed during formal examinations conducted at the banks. "The regulators give a high priority to the financial stability of banks and the banks' compliance with consumer protection regulations," said Christopher J. Spoth, Senior Deputy Director of the FDIC's Division of Supervision and Consumer Protection. "Our aim is to promptly correct weaknesses before they become serious."

Although the FDIC insures nearly all banks in the U.S., we only directly supervise some of the institutions we insure. Protection of consumers' rights at FDIC-supervised banks is among the cornerstones of the FDIC's oversight program. "Through our consumer-related examinations, we ensure that the banks we supervise follow important laws that help consumers receive the information they need to make financial decisions and that protect them from unfair practices," said Luke Brown, Associate Director for Compliance Policy.

These consumer protections include prohibitions against illegal discrimination in lending; requirements that consumers have adequate and truthful information about deposit, investment and loan products; prohibitions against unfair and deceptive practices; and safeguards for consumers' privacy and personal information.

Answers to questions or complaints about banks or banking practices: After deposit insurance questions, matters involving credit cards are the second most common reason consumers contact the FDIC. "Sometimes there's just a misunderstanding about a card's terms and conditions," said Janet Kincaid, Chief of the FDIC's Consumer Response Center. "But other times, things do go wrong, such as when a credit card bill is incorrect. We will review each complaint and, if necessary, investigate." Other common questions or complaints involve checking account features, assorted fees and other industry practices.

In general, Kincaid said, it's best to first contact your bank and try to get your questions answered or problems resolved. But if you believe your bank isn't being responsive to your situation or if you just need help understanding something, don't hesitate to contact your bank's primary federal regulator. You can find out which agency regulates a particular institution by calling the FDIC (see Contact Us) or going to the FDIC's Bank Find page at http://research.fdic.gov/bankfind/.

Free consumer education: FDIC is committed to helping consumers learn how to manage their money. In addition to FDIC Consumer News, our educational products and services include brochures and consumer alerts on topics ranging from deposit insurance to shopping for home loans and preventing identity theft. We also offer free videos on FDIC insurance coverage and how to protect against Internet scams.

The FDIC's "Money Smart" is a financial education curriculum for instructor-led classes and self-paced use on computers. "Money Smart can help anyone, particularly those with little or no banking experience, learn the benefits of effectively managing their money," said Luke W. Reynolds, Chief of the FDIC's Community Affairs Outreach Section.

Support for local neighborhoods and entire communities: "First,
banks provide a reliable place for people to save money for their future, and
that leads to more stable and more prosperous households and communities," FDIC
Chief Economist Richard A. Brown explained. "But beyond that, deposits provide
the funds that banks can use to make loans for homes, businesses and other
purposes that foster community development and strengthen local economies."

The FDIC also promotes local economic development by fostering dialogue and partnerships between financial institutions and the community in support of needs such as housing for low- and moderate-income individuals and loans for small businesses.